By Sarah Rabil - Bloomberg
McGraw-Hill Cos., owner of the Standard & Poor's credit-rating service, said it cut about 3 percent of its workforce, costing $27.3 million in the fourth quarter.
The elimination of 611 jobs, half of them in the education unit, reduced earnings by 8 cents a share in the quarter, McGraw-Hill said today in a statement. Excluding some items, analysts predict fourth-quarter profit of 53 cents a share, the average of nine estimates compiled by Bloomberg.
Credit-rating companies are cutting expenses as demand for their services slows amid slumping sales of mortgage-related debt. Moody's Corp., the second-biggest credit-rating company after S&P, said yesterday it plans to eliminate about 275 jobs, or 7.5 percent of its workforce, at a cost of as much as $52 million.
``We went into a credit crunch within three weeks, and I've never seen anything of such stunning speed,'' McGraw-Hill Chief Executive Officer Terry McGraw said today at a Citigroup Inc. entertainment, media and telecom conference in Phoenix.
McGraw-Hill instituted a hiring freeze in September, cut jobs in the last quarter and will evaluate further cost reductions after the company looks at the market and compiles 2008 revenue projections, McGraw said.
The company reiterated its forecast for double-digit earnings per share growth in 2007, excluding one-time costs such as those announced today.